Talk to your bank first to get pre-qualified for a loan. This will help you get an understanding of what you can afford. From there, you have several options for financing. Below is a list of various types of loans, as well as loan assistance programs.

Types of Loans

• Conventional Loan: A conventional loan is a mortgage that is not insured or guaranteed by the federal government. These are more difficult to qualify for as they require: large down payments, high credit scores, and low income-to-debt ratios. Plus, there is potential for a private mortgage insurance requirement. These loans are typically less costly in the long run since they require more money up front, and are therefore less risky for the lender.

• Federal Housing Administration (FHA) Loan: An FHA loan has lower down payment requirements and is easier to qualify for than a conventional loan. Due to the lower down payment, you do have to pay a Mortgage Insurance Premium (MIP), which protects the lender against losses in the case of mortgage defaults.

• Veterans Affairs (VA) Loan: A mortgage loan available through the US Department of Veterans Affairs. These loans are available to active and veteran service personnel and their families, and have generous terms such as: no down payment, no mortgage insurance, no prepayment penalties, and limited closing costs.

Loan Assistance Programs

• Maine Housing Advantage Program: $3,500 assistance towards your down payment and closing costs if you take a HoMEworks homebuyer education course. See income and purchase price limits here.

• Maine Stream Finance Second Chance Home Loans: This loan targets first time homebuyers with limited credit

• HUD Homeownership Assistance Programs in Maine: lists statewide and regional programs 

• USDA RD Single Family Housing Direct Home Loans: this program assists low-and very-low-income applicants to obtain safe and sanitary housing by providing payment assistance to reduce mortgage payments for a limited time.